Vietnamese Economy Overview

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Table of Contents

Introduction
Vietnam
Conclusion
References

Introduction

An economy refers to a realized social system of making, exchanging, distributing, and consuming goods and services of a given country or a geographical area. A given economy can be taken to be a result of a progression that involves significant changes in technology, the developments in history, the way the government systems are organized, as well as the geographical location, resource mobilization, and the ecological systems, among other factors.

Vietnam

Vietnam, officially known as the Socialist Republic of Vietnam is found in Southeast Asia. It is bordered by China, Laos, and Cambodia. It has a population of over eighty-six million, making it the 13th most populous country in the world.

Throughout history, the Vietnamese economy has been developing. Vietnam has ever since been among the agricultural centers of the world and over the past 20 years, experienced rapid growth due to its changing from an economy that is based on centralized planning to a mixed market economy that is socialist-oriented. Vietnam is in the period of joining fully into the world’s competitive economy, with the interest and intentions of embracing globalization.

It has been rising as the world’s leading agricultural exporter and a clear foreign investment attraction and tourist destination in East and Southeast Asia. With the improvement of managing skills and the potential young labor force, Vietnam is hoped to move to an average developed country in less than two decades to come, as well as keeping a sustainable economy and a well-preserved environment.

Up until Vietnam became a French colony in the mid-19th century, Vietnam’s economy was evenly agrarian, survived regardless of the changes that occurred during that time, and village oriented. The French, however, deliberately developed the regions within Vietnam differently, designating the Northern part for manufacturing and the southern part for agricultural production. The arrangement embellished regional divisions, i.e. the development of exports of minerals like coal coming from the North and agricultural commodities like rice coming from the South. The trade with France and the importation of French manufactured goods motivated Vietnamese internal commerce.

Between the years 1976 and 1986, the country had been unified and had a clear plan for the economy. As from the year 1981, the government set a five-year development plan that with its extremely high goals for annual growth rates for sectors like industry, agriculture, and national income as well as aiming at joining economically the North and the South, the Plan’s aims were not fully achieved. The economy, therefore, remained conquered by production was largely small scale, low labor standards and productivity. The country was then heat by unemployment, lack of raw materials to the industries and limited technological advancement. There was the problem of insufficient food and consumer goods.

This being the situation, a five year plan was then developed with more modest goals that was a concession between ideological and realistic factions; they emphasized on the improvement of the main sectors, which were agriculture and industry. Efforts were also made to spread out planning and improve the decision-making and policy implementation skills of the government officials. Since then, Vietnamese has favored to a great deal, the stability of the economy rather than its growth. While Vietnam as a country has changed and moved towards a market-oriented economy, the government still holds onto the major sectors.

Agriculture is considered the main economic issue. There are clear regulations to govern land ownership. Most of the people earn their income from farming, where they use buffalo to plow the land. The industries also rely on agriculture for most of their raw materials. Among the food crops grown are rice as the major, cassava, soybeans, peanuts, corn, and sweet potatoes. Agriculture is labor-intensive in this country and many of the plantations are of banana, coconut, fruit trees, coffee, tea, and sugarcane. Rubber is also grown. Charcoal is widely produced. A number of industries use the timber obtained from the forests to produce furniture.

There are quite some industries both in the mining and the processing sectors. The food that is produced in agriculture is processed in these industries. The cement industry is well developed and contributes a lot to the resources that are used in infrastructural development. Among the mineral mining are gold, chromium, iron, bauxite, natural phosphates, zinc, tin, antimony, and petroleum, and coal being the leading export. In the year 2003 alone quarrying and mining contributed to the gross domestic product a share of 9.4 percent. It employed 0.7 percent of the total working population.

Petroleum is the main source of energy; coal and hydroelectric power are the other sources that contribute to the country’s energy. Vietnam’s potential of producing natural gas is manifest to the reserves that total to1.3 trillion cubic meters. With an average annual growth of six percent, tourism sector contributed an approximate percentage of forty to the gross domestic product in the last fifteen years. The sector registered 2.9 arrivals that was a significant increase from the previous year. However, the tourism sector was affected by the severe acute respiratory syndrome (SARS) epidemic that occurred in Asia.

Up until 1975, the government dominated the banking sector. It had a monopoly with no commercial and foreign in the market. However, in recent times the foreign investment in the banking sector has been allowed as well as the local commercial banks. Some foreign banks have been allowed to set up branches all over the country. The Ho Chi Minh City Securities Trading Center, established in 2000 has ever since expanded with the number of listed companies rising to twenty-eight. Vietnam set up another trading company to speed up the process of partial privatization that it has lately concentrated on.

Conclusion

The Vietnamese currency has traded fairly well with the other major currencies in recent times, with an exchange rate of about 15,984 Vietnamese dongs (D) per US dollar by April 2008. Due to the increase in worldwide food prices, there has been a sudden rise in inflation rates. The economic relations with other countries like the USA, China, faces challenges but the government’s interventions and agreements, it has helped to improve the exports.

The greatest economic resource in Vietnam is the highly energetic, young, educated population its elongated coastline provides good harbors access to the marine resources and beaches for tourist destinations. However, its poor infrastructural system is a major setback to socio-economic development.

References

Binh Tran-Nam, Chi Do Pham. “Vietnam: Awakening the Dormant Dragon” Touchstone, 1992: 18-35
Binh Tran-Nam. “The Vietnamese Economy: An Emerging Economy” Longhorn, 2002: 100-150
Susan Lavigne. “Vietnam: Growth in Asian Economies” Mc-Graw Hill, 2000: 56-100
Fredrick Ochieng. “Emerging Economies: Vietnam” Touchstone, 1996: 68-124

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Vietnamese Economy Overview

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